IN RE: the Claim of Mary A. ALM

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Supreme Court, Appellate Division, Third Department, New York.

IN RE: the Claim of Mary A. ALM, Appellant. Commissioner of Labor, Respondent.

Decided: February 20, 2003

Before:  CARDONA, P.J., PETERS, SPAIN, CARPINELLO and KANE, JJ. Cornell Legal Aid, Ithaca (Shane Cooper, Law Intern), for appellant. Eliot Spitzer, Attorney General, New York City (Steven Segall of counsel), for respondent.

Appeal from a decision of the Unemployment Insurance Appeal Board, filed January 3, 2000, which, inter alia, ruled that claimant was ineligible to receive unemployment insurance benefits for certain dates because she was not totally unemployed.

Claimant, a licensed massage therapist, applied for and obtained partial unemployment insurance benefits in October 1997 when the physical therapy business where she worked as a massage therapist experienced a lack of work.   On her initial application for benefits, she answered affirmatively the question of whether she was engaged in activity which “brings in or may bring in income” and was asked to fill out a business principal questionnaire;  she did so, indicating that in addition to her part-time employment, she engaged in freelance massage therapy, using a local massage therapy center where she rented space on an as needed basis and for which she was paid by clients as services were rendered.   Thereafter, in certifying for weekly benefits, she reported to the local unemployment insurance office the dates on which she performed freelance massages and the dates she worked for her physical therapist employer, until that part-time employment ceased in April 1998.   Thereafter, she reported the intermittent dates on which she performed freelance massage services and did not receive benefits for those dates.   Throughout this time, claimant continued to seek full-time employment.   Following an investigation, the Department of Labor concluded in December 2000 that claimant had not reported all activity related to her work as a freelance massage therapist and that she was not totally unemployed 21 days in 1998 on which she had certified that she was not working and for which she had received benefits.   The Department also found that she had made willful false statements when certifying for benefits, holding her liable for $542.50 in overpayments and reducing her right to future benefits by 80 days.

On claimant's appeal following de novo hearings in 2001 before an Administrative Law Judge (hereinafter ALJ), the Unemployment Insurance Appeal Board determined that for 17 days of the 21 dates in issue claimant was not totally unemployed as she had engaged in activities related to her provision of freelance massage therapy services, such as depositing checks from clients and writing checks for books and workshops, and that she had made willful misrepresentations to obtain benefits.   The Board referred the matter of the amount of overpayments (see Labor Law § 597[4] ) and the penalty to the Department for recalculation.   Claimant now appeals.

 By statute, to be entitled to unemployment insurance benefits, claimants must be “totally unemployed” (Labor Law § 591[1] ), meaning “the total lack of any employment on any day” (Labor Law § 522).   To that end, self-employment constitutes employment (see Matter of Bruckner [Levine], 50 A.D.2d 647, 648, 374 N.Y.S.2d 803) and what constitutes total unemployment is a factual issue for the Board to resolve (see Matter of McCune [Ross], 83 A.D.2d 659, 660, 442 N.Y.S.2d 204, appeal dismissed 54 N.Y.2d 1023, 446 N.Y.S.2d 263, 430 N.E.2d 1316), which this Court will not disturb provided it is supported by substantial evidence in the record (see Matter of Stanton [Commissioner of Labor], 291 A.D.2d 698, 699, 737 N.Y.S.2d 700;  Matter of Gross [Hudacs], 195 A.D.2d 742, 600 N.Y.S.2d 300).

 On review, we agree with claimant's contention that her isolated acts of depositing checks from her freelance clients into her personal checking account on days on which she performed no massage therapy services or any other related activity did not constitute employment on that day, i.e., she was totally unemployed on those dates (see Labor Law §§ 522, 591).   The uncontroverted evidence established that she was not starting up or operating an ongoing business;  she had no “doing business as” or business cards and never opened a business bank account or advertised;  she performed only intermittent freelance massage services, which she reported;  and, for convenience, she merely at a later date-on which no services were performed-deposited the client checks for those services into her personal account along with other personal deposits.   Under these circumstances, we conclude that claimant's personal act of depositing checks did not, by itself, constitute work-related activity or activity in furtherance of her freelance activity so as to render her not totally unemployed for those specific dates (see Matter of Ferber [Sweeney], 233 A.D.2d 823, 650 N.Y.S.2d 443;  cf.   Matter of Santo [Commissioner of Labor], 274 A.D.2d 816, 711 N.Y.S.2d 75;  Matter of Bick, 272 A.D.2d 705, 708 N.Y.S.2d 912;  Matter of Di Pietro [Commissioner of Labor], 250 A.D.2d 916, 917, 672 N.Y.S.2d 516;  Matter of Blackmore [Commissioner of Labor], 250 A.D.2d 902, 673 N.Y.S.2d 232;  Matter of Gottwald [Sweeney], 216 A.D.2d 623, 624, 627 N.Y.S.2d 478;  Matter of Chordas [Hudacs], 207 A.D.2d 937, 616 N.Y.S.2d 681;  Matter of O'Leary [Roberts], 93 A.D.2d 915, 461 N.Y.S.2d 588;  Matter of Mantel [Ross], 67 A.D.2d 786, 412 N.Y.S.2d 692).

 Claimant also challenges the Board's determination that her activity on specified dates of writing checks drawn on her personal account to pay for workshops and books constituted employment on those dates even though no massage therapy services were rendered.   However, even minimal check writing activity to pay business-related expenses, regardless of the profitability of the business activity, supports the finding that claimant was not totally unemployed on the days she wrote the checks in issue and certified she was not working, with one exception (see Matter of Kesenci [Commissioner of Labor], 293 A.D.2d 803, 739 N.Y.S.2d 495;  Matter of Stanton [Commissioner of Labor], supra at 698, 737 N.Y.S.2d 700;  Matter of Martz [Commissioner of Labor], 273 A.D.2d 578, 708 N.Y.S.2d 760;  Matter of Bick [Commissioner of Labor], supra;  Matter of Ours [Commissioner of Labor], 268 A.D.2d 669, 700 N.Y.S.2d 584;  Matter of Kazin [Commissioner of Labor], 267 A.D.2d 581, 699 N.Y.S.2d 226;  Matter of Stasko [Commissioner of Labor], 262 A.D.2d 701, 690 N.Y.S.2d 781;  Matter of Johnston [Commissioner of Labor], 253 A.D.2d 949, 950, 678 N.Y.S.2d 160;  Matter of Blackmore [Commissioner of Labor], supra;  Matter of Jacobs [Sweeney], 221 A.D.2d 788, 634 N.Y.S.2d 12;  Matter of Gross [Hudacs], 195 A.D.2d 742, 600 N.Y.S.2d 300;  Matter of Shu-Lan Chu [Hudacs], 186 A.D.2d 339, 340, 588 N.Y.S.2d 54;  Matter of Di Giacomo [Hudacs], 183 A.D.2d 1095, 583 N.Y.S.2d 687;  see also Matter of O'Leary [Roberts], supra at 915-916, 461 N.Y.S.2d 588).   With regard to claimant's check writing activity, substantial evidence exists in the record that when she applied for benefits, claimant was provided with the unemployment insurance information handbook explaining the reporting requirements and, shortly thereafter, was instructed to declare any and all activity related to her freelance work, regardless of how little time might be involved, including “purchasing related materials or supplies, writing checks for supplies or rent.”   Thus, with one exception, we perceive no basis to disturb the Board's determination, based as it is upon substantial evidence in the record, that claimant made willful misrepresentations (see Labor Law § 597[3] ), and that she made false statements of fact which, even if unintended, permitted recovery of benefits (see Labor Law § 597[4];  Matter of Valvo [Ross], 57 N.Y.2d 116, 454 N.Y.S.2d 695, 440 N.E.2d 780).   The exception to this conclusion is the check written to the “Corner Book Store” on May 23, 1998.   The record lacks substantial evidence to support the finding or inference that this particular check related to her freelance activity or massage therapy profession (see Matter of Masciopinto [Commissioner of Labor], 252 A.D.2d 891, 892, 676 N.Y.S.2d 325;  see also Matter of Di Maria v. Ross, 52 N.Y.2d 771, 772, 436 N.Y.S.2d 616, 417 N.E.2d 1004).

We have considered claimant's remaining contentions, including her due process argument, and find they are without merit.   Accordingly, this matter should be remitted to the Board for a recalculation of recoverable benefits and penalty based upon the determination herein.

ORDERED that the decision is modified, without costs, by reversing so much thereof as found that claimant was ineligible to receive benefits on certain specific dates;  matter remitted to the Unemployment Insurance Appeal Board for further proceedings not inconsistent with this Court's decision;  and, as so modified, affirmed.

SPAIN, J.

CARDONA, P.J., PETERS, CARPINELLO and KANE, JJ., concur.

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